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That's the problem with public perception. Everybody talks about the current superstars and thinks the the older companies are declining. If you have read news
by maxxxxx 8y ago
That's the problem with public perception. Everybody talks about the current superstars and thinks the the older companies are declining. If you have read news for the last year it would be hard to imagine that Microsoft just overtook Amazon in terms of valuation.
- airstrike 8y agoMicrosoft took over Amazon in terms of Market Cap, but not valuation. MSFT Market Cap $839.7 Less: Net Cash (59.7) Total Enterprise Value $780.0 AMZN Market Cap $834.5 Less: Net Cash (5.6) Total Enterprise Value $828.9 The discrepancy is all the more evident in terms of multiple (or the "exchange rate" for investing in these companies). MSFT trades at 21.0x 2019E P/E and 12.5 TEV / 2019E EBITDA while AMZN trades at 60.8x 2019E P/E and 19.5x TEV / 2019E EBITDA multiples.
- maxxxxx 8y agoI guess I confused the terms but I think my point still stands.
- mrep 8y agoAny comparisons to Amazon need to be taken in context. Their stock price went from $300 4 years ago to $2000 2 months ago and now is around $1500. They were ahead on both metrics for a while but since they are a super high growth stock, it's been highly volatile.
- PeterisP 8y agoThe perception issue is less about the current superstars vs the older companies but rather about the highly visible consumer products vs B2B offerings. Everyone things IBM is gone because it stopped producing products for end users - but the majority of money and development effort is spent on software that's purely for business internal use.